Separate physical loss from settlement loss factors
Current produces resistive heating. Increasing voltage reduces current for a given transferred power, but actual network limits also include voltage and stability. A marginal loss factor describes an incremental settlement relationship; it is not simply an asset's measured annual loss percentage.
The lesson
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01Follow the electricity—and label the meters
The question behind a connection proposal
A developer says a 100 MW project can supply a factory. Before asking about price, ask where each MW is measured, how much can cross the connection, and what happens when part of the network is unavailable. A nameplate rating alone answers none of those questions.
Three physical layers
- 01
Generation and connection
Plant auxiliaries use some output before export. The connection point defines an important boundary for technical studies and metering.
- 02
Transmission and substations
Bulk transfers connect regions and large loads. Substations transform voltage and provide switching and protection.
- 03
Distribution and customers
Feeders serve homes and businesses. Rooftop solar and batteries can reverse local power flow; some large customers connect directly to transmission.
One hour, three different energy quantities
Check your understanding
The diagram shows 100 MWh at the generator and 95 MWh at the customer. Is all 5 MWh a network loss?
Show reasoning
No. In this example, 2 MWh is station use and 3 MWh is network loss.
Use the 98 MWh export meter as the input boundary for the network-only calculation. Comparing unlike meter boundaries mixes two different effects.
02Voltage, current and the cost of moving power
Current for a balanced three-phase transfer
I = P ÷ (√3 × VLL × PF)
- P
- Total three-phase active power (W)
- VLL
- Line-to-line RMS voltage (V)
- PF
- Power factor (dimensionless)
- I
- RMS line current (A)
Sinusoidal, balanced three-phase teaching model. Use watts, volts and RMS amperes. This is not a cable-sizing method.
| Voltage | Calculated current | Interpretation |
|---|---|---|
| 132 kV | About 138 A | Higher voltage, lower current |
| 66 kV | About 276 A | Half the voltage, twice the current |
Why this matters to a project analyst
More current means more resistive heating and greater use of equipment current ratings. At fixed active power and voltage, a lower power factor also increases current. Reactive-power requirements therefore belong in connection studies, not just in an electrical glossary.
Check your understanding
At unchanged active power and voltage, PF falls from 1.0 to 0.8. What happens to current?
Show reasoning
It rises by 25%.
I₂ / I₁ = 1.0 / 0.8 = 1.25. With unchanged resistance, conductor heating rises by 1.25² = 1.5625, or 56.25%.
03Calculate heating before averaging the result
Three-phase conductor heating
Ploss = 3 × I² × R
- R
- End-to-end resistance of one phase conductor at the assumed temperature (Ω)
Equal RMS phase currents and equal conductor resistance per phase. Result is watts when current is in amperes and resistance in ohms. Excludes transformer, dielectric and other losses.
A circuit with 5 Ω resistance per phase
200 A
3 × 200² × 5 = 600,000 W = 600 kW
The factor of three counts the three phase conductors. Do not count it again in the resistance.
400 A
3 × 400² × 5 = 2,400,000 W = 2.4 MW
Doubling current quadruples heating when resistance stays unchanged.
Half an hour at each loading
0.6 MW × 0.5 h + 2.4 MW × 0.5 h = 1.5 MWh
Calculate each interval’s loss power, then multiply by its duration and add the energies.
Result: Squaring the average 300 A instead gives 1.35 MWh. It understates loss by 0.15 MWh because heating is nonlinear.
Use the calculator in Worked example
Try 200 A and 5 Ω, then 400 A with the same resistance. The result is instantaneous three-phase conductor loss in kW—not a loss percentage, a settlement factor or annual energy. To estimate energy, you still need the loading profile and interval durations.
Check your understanding
A circuit loses 600 kW for 20 minutes. How much energy is lost?
Show reasoning
0.2 MWh, or 200 kWh.
600 kW × 20/60 h = 200 kWh. Keep power and energy units separate.
04Reconcile energy without inventing a loss
A defined-boundary energy balance
Loss = energy in − energy out − increase in stored energy
Include all boundary flows, use one time interval and consistent signs. Treat an unexplained residual as unverified until metering and inventory are checked.
Return to the three-meter diagram
Separate station use
100 − 2 = 98 MWh exported
Station use is within the plant boundary in this illustration.
Calculate network loss
98 − 95 = 3 MWh
The defined network has no other injections or withdrawals in this example.
State the denominator
3 ÷ 98 × 100 ≈ 3.06% of network input
Do not report 5% as the network-only loss; that also includes station use.
Result: A useful result contains the quantity, unit, boundary, time period and denominator.
| Check | What can go wrong |
|---|---|
| Time and revisions | Different interval boundaries or revised readings create a false imbalance. |
| Direction and units | Import/export signs or kWh/MWh conversions can reverse the result. |
| Coverage | An unlisted embedded generator or feeder changes the boundary balance. |
| Storage | Energy retained inside the boundary is not necessarily dissipated energy. |
Check your understanding
During one hour, 100 MWh enters, 92 MWh leaves and stored energy increases by 6 MWh. What is the residual loss, assuming complete accurate metering?
Show reasoning
2 MWh.
100 − 92 − 6 = 2 MWh. If the storage change is unknown, the 8 MWh input–output difference cannot all be assigned to loss.
05A low-loss connection can still be constrained
| Limit | Ask the study team |
|---|---|
| Thermal | Which line or transformer reaches its current or temperature rating? |
| Voltage / reactive capability | Can acceptable voltages be maintained across the studied operating conditions? |
| System security / stability | Does the system remain acceptable after the specified disturbance? |
| Connection and plant limits | What export limit and operating conditions actually apply to this project? |
Congestion is not another name for energy loss
Loss is dissipated energy. A constraint restricts feasible operation. AEMO uses constraint equations to represent operating limits; the effect can involve multiple generators, loads and interconnectors. An outage can alter both the relevant equations and the available transfer capability.
A deliberately simple export envelope
Compare limits on the same export variable
Thermal 80 MW; voltage 70 MW; security 60 MW
Assume these independent caps apply simultaneously to the same connection under one specified network state.
Apply the tightest cap
Export ≤ min(80, 70, 60) = 60 MW
Do not add the limits or subtract each cap separately from nameplate capacity.
Result: This envelope is a screening illustration. Real coupled network constraints require power-flow and dispatch analysis, not this minimum-of-three shortcut.
Distributed generation changes the study cases
A distribution feeder may import heavily on a hot evening and export during a sunny low-demand period. Review both directions, transformer loading and voltage conditions. Do not assume the worst import case also describes the worst export case.
Check your understanding
An upgrade raises the thermal cap from 80 to 100 MW in the simplified envelope. What is the new allowed export?
Show reasoning
Still 60 MW under the stated limits.
The unchanged security cap remains binding. An upgrade only creates extra transfer if it relaxes the relevant limiting condition.
06Keep physical losses separate from settlement factors
Which factor, for which period?
AEMO publishes transmission marginal loss factors (MLFs) and distribution loss factors with their methodologies. An MLF is not simply one minus the annual measured loss percentage. Record the applicable connection, financial year, publication version and price reference before using a factor.
An illustrative generator energy-revenue sensitivity
Revenue = metered export × regional price × MLF
Simplified NEM transmission-connected export example: one interval, positive export, no DLF, contracts, fees or other settlement adjustments. Never apply a factor again to already adjusted revenue.
| Regional price | MLF 0.96 | MLF 0.90 | Revenue change |
|---|---|---|---|
| A$80/MWh | A$7,680 | A$7,200 | −A$480 |
| −A$20/MWh | −A$1,920 | −A$1,800 | +A$120 (smaller payment) |
Check your understanding
Measured network energy loss is 3.06% in one hour. Can you use 0.9694 as the project’s published MLF?
Show reasoning
No.
The physical average-loss observation and the published marginal settlement factor answer different questions. Retrieve the applicable published factor instead of deriving it from this meter balance.
07Compare two connections on the same basis
A developer has two connection options
For one synthetic hour, 100 MW is available at the grid-export boundary before applying a network export cap. Assume constant output within the hour, a regional price of A$80/MWh and the simplified settlement treatment from the previous chapter. No station-use deduction is needed: these quantities are already net export.
| Assumption / result | Option A | Option B |
|---|---|---|
| Export cap | 80 MW | 100 MW |
| Assumed MLF | 0.98 | 0.94 |
| Metered export | 80 MWh | 100 MWh |
| Illustrative revenue | 80 × 80 × 0.98 = A$6,272 | 100 × 80 × 0.94 = A$7,520 |
Explain the result before recommending anything
Option B earns A$1,248 more in this hour despite its lower factor. Its extra exported energy outweighs the factor difference at this positive price. It is not automatically the better investment: connection cost, commissioning time, outages, annual constraint patterns and price shape are not provided.
Check your understanding
If A’s cap rises to 100 MW with its MLF and price unchanged, how much extra revenue is available in this hour?
Show reasoning
A$1,568 before upgrade costs and other changes.
20 MWh × A$80/MWh × 0.98 = A$1,568. This does not establish annual benefit or justify construction.
08Prepare a connection briefing someone can check
Your assignment: does more export capacity create value?
Use the three synthetic half-hour blocks below. Available power is net at the connection before a 60 MW export cap. Assume an MLF of 0.95, flat conditions within each block and no other limits, losses or costs. These are aggregated teaching blocks, not NEM settlement-interval data.
| Block | Duration | Available power | Export cap | Regional price |
|---|---|---|---|---|
| 1 | 0.5 h | 40 MW | 60 MW | A$50/MWh |
| 2 | 0.5 h | 80 MW | 60 MW | A$0/MWh |
| 3 | 0.5 h | 60 MW | 60 MW | A$100/MWh |
Produce a one-page briefing
- 01
Calculate
For each block: export = min(available, cap); energy = export × duration; illustrative revenue = energy × price × MLF. Calculate curtailed MWh too.
- 02
Challenge
Raise the cap to 80 MW. Report extra exported energy and extra revenue separately. Explain why those results differ.
- 03
Recommend next evidence
Draw the meter boundary. Request interval generation and prices, constraint/outage studies, applicable factors, connection costs and a commissioning schedule before ranking investments.
Check your understanding
Compare your totals, then explain what the upgrade changes.
Show reasoning
Base case: 80 MWh export, 10 MWh curtailed and A$3,800 revenue. The higher cap adds 10 MWh but A$0 revenue in this scenario.
Export energies are 20, 30 and 30 MWh; revenues are 950, 0 and 2,850 dollars. Only block 2 changes under an 80 MW cap, and its price is zero. Real contracts, certificates, costs and altered prices could change the economic result; none is included here.
Watch the explanation
Key terms in plain English
- Voltage
- Electrical potential difference: the driving condition for current in a circuit. Voltage level is not itself a quantity of energy.
- Current
- Flow of electric charge, measured in amperes. In the circuit context it is different from the amount of energy used over a period.
- MLF
- Marginal loss factor: a published factor representing an incremental loss relationship for market purposes. It is not simply the annual percentage loss measured between two meters.
Supporting diagrams
Follow the energy, account for the loss
A one-hour illustration with a consistent metering boundary.
- 01 · Generator export100 MWh
Measured into the network
- 02 · Network losses5 MWh
Energy dissipated between the two meters
- 03 · Customer receipt95 MWh
100 − 5 = 95